Business acquisitions are booming.
More and more entrepreneurs are buying other companies instead of starting from scratch. There are many reasons for this, but the main one is that it’s a great way to get a leg up on the competition.
If you’re considering buying a business, now is the time to do it. In 2021, mergers and acquisitions accounted for $2.9 trillion in transactions — a 55% increase from the previous year, according to KPMG. And 80% of executives expect that momentum to continue through 2022.
With easy financing and a promising future for the economy, businesses are expected to continue to grow in the years to come.
Golden Age of Business Acquisitions
We’re in the midst of a golden age for business acquisitions. Within the next 20 years, business owners will sell an estimated $10 trillion in assets. That’s a lot of money, and it’s going to create a wide-open lane for entrepreneurs who are looking to acquire existing businesses. In fact, business mergers and acquisitions are reaching all-time highs due to more and more Baby Boomers retiring. With trillions spent on M&A activity in the past year alone, it’s clear that businesses are taking advantage of this growth opportunity. No matter what the future holds, one thing is for sure: business acquisitions are here to stay.Benefits of Buying a Business
There are many benefits to buying a business instead of starting from scratch.Established Customers and Teams
For one, you’ll have an established customer base. You’ll also have a team of employees who are already familiar with the business. And you won’t have to go through the challenge and expense of establishing a successful business from the ground up.Opportunity for Expansion
A business with a robust infrastructure can be a great way to get a head start on your competition. And if you’re strategic about it, you can use an acquisition to enter new markets and grow your business in ways you never thought possible. By having established cash flow generation, you’ll be able to make quicker and more efficient business moves.Existing Data for Informed Decisions
Another advantage of acquisitions is that you’ll already have the data and information needed to make informed decisions. When starting a business from scratch, it’s either guess work or spending valuable time and effort on market research. But with an established business, you can track established trends to see what’s working and what isn’t. And you can evaluate the company’s previous successes and failures to make smarter decisions.A Foothold in the Industry
Acquisitions can also help you build relationships within your industry. If you want to expand your network, buying a business is a great way to do it: no more cold-calling or attending networking events. Instead, you instantly connect with other organizations that can help you grow.Why Is Now the Time to Buy?
Now is a great time to buy a business for several reasons.- Strong market conditions: While some may fear a recession, this economic sector is entering a period of growth, which means the market is ripe for acquisitions.
- Low-interest rates: Interest rates are still low compared to previous hikes, making business acquisition a wise investment.
- Increased access to capital: Companies have increased capital access thanks to new tax laws, making financing an acquisition easier.
- A favorable regulatory environment: The current administration is business-friendly, and there are few regulatory hurdles to clear when buying a business.
- Increased competition: With more businesses being started, there’s increased competition for talent, customers, and market share. An acquisition can help you stay ahead of the game.
